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TMI Blog2015 (8) TMI 685X X X X Extracts X X X X X X X X Extracts X X X X ..... verted it in INR and diverted the said INR to their branch in India. The whole mode of payment is as per the RBI guidelines, the learned Commissioner (Appeals) is in error in concluding that the remittance had not been received in foreign exchange under the Export of Service Rules. - appellant has received the remittance in convertible foreign exchange. Disallowance of input service of life insurance premium and Rent-a-cab services - cost incurred with respect to car hire rental and insurance premium paid for the staff, form part of the cost for which bills have been raised in the quarter and remittance have been received by the appellant assessee, for providing the output service, I hold that these two services in question are eligible input service. Whether refund can be claimed on the basis of services provided during the refund period but the invoices for the same has been raised in the subsequent quarter - In respect of the refund claimed for the period November, 2011 to March, 2012, the refund claim filed on 30.10.2012 based on the invoices dated 9.1.2012, 14.6.2012 and 31.8.2012. The period of refund was up to March, 2012 and therefore, the invoices raised at later dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18,44,079 18,03,490 40,589 3. ST/88436/14 Apr 10 to Sep 10 13,88,751 9,68,012 4,20,739 4. St/88438/14 Nov 11 to Mar 12 1344016 3,02,672 10,41,344 TOTAL 80,08,276 30,74,174 49,34,102 3. The appellants are service provider, exporting 100% of its service being a 100% Exporter to one single client located outside India viz. Mount Kellett Capital Management Mauritius Ltd. (MKML in short) located at Mauritius. The service is in the nature of Banking and other Financial Services. As per the agreement between the appellant and foreign client, the appellant is entitled to get remuneration on cost plus basis. As per the agreement at end of every quarter, the appellant raised bill on their client. The appellant is providing advice, recommendations in the form of reports or investment memoranda with regard to suitable investment opportunities in I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xchange, the appellant satisfied both the conditions under Rule 3(2) (a) 9b) of the Export of Service Rules, 2005. Accordingly, I hold that it is export of service. I further hold that it is immaterial how the foreign client utilizes the reports prepared by the appellant. Similar view has been taken by this Tribunal in the case of N.V. Advisory Pvt. Ltd. [Application No.ST/98183 to 98185/13 ] and Bain Capital [Appeal No. ST/88442/2014 ]. 5. The second issue is whether the appellant have received remittance in convertible foreign exchange. The Assistant Commissioner in Order-in-Original dated 5.8.2008 has observed that the appellants have received all the export proceeds in Indian Currency only. 5.1 The learned Counsel for the appellant urges that this observation of the adjudicating authority is erroneous and further learned Commissioner (Appeals) has also erred and accepted the findings. He has produced a copy of FIRC No. 2009030964, which is at Sr. No. 4 in the table at page 3 of the Order-in-Original, wherein HSBC Ltd. at Mumbai has certified that they have received a remittance/proceeds on behalf of the appellant and credited in their Account No. 051-653269-001, further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buyer. It is evident from the aforementioned table, at Sr. No. 2 that the appellant's Bank at Mumbai have rightly received the money in Indian rupees as RBI permits payment in rupee from the account of a Bank situated in any foreign country other than a member country of Asian Clearing Union. Thus, the foreign remittance is in order. 5.2 The learned Counsel further explained that the modus operandi of the Bank is, if a Bank received foreign currency abroad from the buyer of service and thereafter Bank converted it in INR and diverted the said INR to their branch in India. The whole mode of payment is as per the RBI guidelines, the learned Commissioner (Appeals) is in error in concluding that the remittance had not been received in foreign exchange under the Export of Service Rules. 5.3 Accordingly, I hold that the appellant has received the remittance in convertible foreign exchange. 6. The third issue is whether there is correlation between the export invoices and the FIRC (remittance). It has been observed in the impugned order that although details of FIRC for each period under the column (invoice against each FIRC is adjusted), the appellant have indicated NA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -calculation and details of the bills raised. Hence, on this issue, I remand the matter to the adjudicating authority, who shall after allowing the opportunity of hearing and perusing the evidences produced till the date of hearing before him, will examine the correlation of bills with FIRC. In case it is found that the appellant have received the remittance for the bills raised, the claim of the refund cannot be rejected. The remittance may be received either prior to the bills raised or post billing. 7. The next issue is with regard to disallowance of input service of life insurance premium paid on the life insurance of the staff of the appellant and also as regards the Rent-a-cab services availed for the travel of the staff of the appellant. In the impugned order it has been held that these expenditures are in nature of welfare activities of the appellants and in no way connected with the export of services provided by them. Reference was made to rule 2(l) of the Cenvat Credit Rules, 2004 and it was concluded that CENVAT Credit on input service can be allowed only if the same is used by a provider of taxable service for providing an output service and not otherwise. Reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is so wide that it would cover innumerable items as input and to avoid such contingency the Legislature has incorporated the inclusive part after the substantive part, qualified by the place of use. For example, one of the categories mentioned in the inclusive part is used as packing material . Packing material by itself would not suffice, till it is proved that the item is used in the course of manufacture of final product. Mere fact that the item is a packing material value of which is included in the assessable value of final product will not entitle the manufacturer to take credit. Oils and lubricants mentioned in the definition are required for smooth running of machines, hence they are included as they are used in relation to manufacture of the final product. 7.4 In reply, the learned Counsel for the appellant argues that they are raising the bills on cost plus basis. The sample bill/invoice dated 14.6.2009 raised on their client at Mauritius for service for the period quarter ending 31.3.2009 for ₹ 28,43,17,578/- is produced. On the reverse of the invoice, it is pointed out that car hire rentals (rent-a-cab) and life insurance premium for staff, are expenses, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l as billing for output services and/or export of goods. What is required is that due to the nature of the business of the appellant, they are unable to utilize the CENVAT Credit availed, being export of goods/service. 8.2 Having considered the rival contentions, I hold that the learned Commissioner (Appeals) is in error in considering one to one correlation and/or correlation with the bills raised for the each receipt or bill period. In view of the admitted fact that appellant is a 100% exporter and all its output services are exported to a single client located abroad and all the payments are received from the same client, this issue is decided in favour of the appellant. I have already remanded the issue of correlation of the remittances and invoices. 9. The last issue in these appeals is whether invoice for the period January to March, 12, which was raised subsequently during the subsequent quarter April to June, whether the Revenue is justified in rejecting the claim stating that as the rebate was claimed for the period April, 12 to June, 12 quarter, and the invoices for the previous quarter when there were previous receipts have been included in the refund claim for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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